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Food Producers Feel Ethanol Pinch
By Mr Ethanol | June 3, 2008
HispanicBusiness:
Is your soft drink costing you more? Blame corn. Is your pork chop more expensive? Spending more money to bake? Blame corn.
The cob-cultured kernels are taking heat for much of the recent runup in prices on everyday goods, at least when food producers, grocery chains and restaurants are pointing fingers.
These businesses protest that the federal government’s mandate to make more ethanol — most of which comes from corn — has caused corn demand to spike, resulting in higher prices for the crop. And higher prices on corn mean higher prices on many items because it’s used in everything from cereal and snacks to sweeteners and feed for livestock.
Company officials at chicken processor Pilgrim’s Pride say the rising cost of corn has given them plenty to squawk about.
The company buys 324 million bushels of corn every year. With corn prices up about 135 percent over the past two years, the cost of feed — the company’s biggest input cost — has skyrocketed.
“We closed a plant (May 23) in North Carolina, and we have six distribution centers closing,” said Ray Atkinson, director of corporate communications for Pilgrim’s Pride, which has plants in Chattanooga and Dalton. “That’s 1,100 jobs that are being lost because of the government’s failed ethanol policy.”
The energy bill passed last year by Congress mandates the use of 9 billion gallons of ethanol this year, ramping up to 36 billion gallons by 2022, to reduce the country’s dependence on foreign oil and lower greenhouse gas emissions.
Corn prices have gone from about $2.50 a bushel two years ago to about $6 a bushel today. More.
Topics: Agriculture, Ethanol, Market, News |
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